Mountstone Partners create and manage bespoke investment portfolios for wealthy families, charities and trusts. CEO James Keen publishes a monthly investment update for their clients.
Here is James Keen’s summary of Philip Hammond’s spring budget, highlighting those parts that are most likely to be relevant to the over 50s – please contact him if you have any queries about the markets or indeed your portfolio.
The personal allowance will increase to £11,500 for 2017/18.
The main rate of Class 4 National Insurance Contributions for self-employed people will increase to 10% from April 2018, with a further increase to 11% from April 2019.
Tax bands and rates
Legislation has already been enacted to increase the basic rate band to £33,500 for 2017/18. The higher rate threshold will therefore rise to £45,000 in 2017/18.
The additional rate of tax of 45% remains payable on taxable income above £150,000 for all UK residents.
Reduction in the Dividend Allowance
The Dividend Allowance will be reduced from £5,000 to £2,000 from April 2018.
Individual Savings Accounts (ISAs)
The overall ISA savings limit is £15,240 for 2016/17 but will jump to £20,000 in 2017/18.
Corporation tax rates
Corporation tax rates have already been enacted for periods up to 31 March 2021. The main rate of corporation tax is currently 20%. The rate will then be reduced as follows:
19% for the Financial Years beginning on 1 April 2017, 1 April 2018 and 1 April 2019
17% for the Financial Year beginning on 1 April 2020.
The Chancellor has now announced £435 million of further support for businesses, including:
support for small businesses losing Small Business Rate Relief to limit increases in their bills to the greater of £600 or the real terms transitional relief cap for small businesses each year
providing English local authorities with funding to support £300 million of discretionary relief, to allow them to provide support to individual cases in their local area.
The government will also introduce a £1,000 business rate discount for public houses with a rateable value of up to £100,000, for one year from 1 April 2017. This is subject to state aid limits.
James is co-founder of Mountstone Partners and is responsible for managing client portfolios, chair of the asset allocation committee and has oversight of the portfolio construction process.
Prior to founding Mountstone, James was an Investment Director at Brooks Macdonald, a firm that manages £4.5 billion of private client portfolios. At Brooks Macdonald James was one of 3 Investment Committee members responsible for the entire investment process. He was an Asset Allocation Committee member, head of 5 London investment teams and was responsible for client relationships representing £239 million of client portfolios.
James has been recognised as one of the “Top 40 Under 40” advisers in wealth management in the UK (as awarded by PAM) for the last 2 years running